A new report from the American Trucking Associations’ Technology & Maintenance Council and Decisiv Inc. indicated parts and labor costs for the trucking industry fell in the fourth quarter of 2024.
After rising in the third quarter of 2024, following three consecutive quarterly decreases, combined parts and labor costs fell again by 1.6 percent, according to the latest Decisiv/TMC North American Service Event Benchmark Report. Lower costs in Quarter 4 (Q4) compared to the previous quarter reflect an expected drop in service activity following traditionally higher pre-holiday freight volumes in the third quarter of each year.
The ATA said its For-Hire Truck Tonnage Index supports this conclusion by indicating declines in November and December of last year.
For the report, Decisiv collects and analyzes parts and labor costs for 25 Vehicle Maintenance Reporting Standard (VMRS) system level codes. These codes account for more than 97 percent of total parts and labor spending and more than 7 million assets during 300,000+ monthly maintenance and repair events at 5,000+ service locations.
In this quarter as well, combined costs increased in only nine of the 25 VMRS Systems tracked in the Decisiv TMC Benchmark Report compared to 19 systems in the previous quarter. The latest quarterly decrease is even more significant considering that the report is based on an increase of 4.7 percent in the number of service operations, according to a statement from the ATA.
“Lower parts and labor costs are good news for service providers and fleets after last quarter’s increase,” said Dick Hyatt, CEO of Decisiv. “While they indicate that parts supply chains are more stable and there is improved continuity in the ranks of technicians, the data also show that service operations are handling an increase in events more productively and efficiently. With more effective service management, communication, and collaboration practices between their in-house operations and dealers, fleets are realizing how best practices can lead to a better bottom line.”
The latest quarter-over-quarter (QoQ) data also indicated decreases in parts costs of -1.5 percent and -1.9 percent in labor expenses. The lower costs in Q4 may point to stabilizing parts prices and in some cases are lower due to a replenished supply chain. While the number of operations is up, lower labor costs are also possibly the result of less turnover in the ranks of technicians employed by fleets and dealers.
The ATA said year-over-year (YoY) combined costs in Q4 dropped -1.6 percent on decreases of -2.0 percent for parts and -0.9 percent for labor. Illustrating that this represents a continuing trend, the decreases follow a -1.3 percent drop in combined costs YoY in the Q3 report.YoY parts costs also fell for the second quarter in a row. However, the lower YoY labor costs were a reversal of the higher expenses seen in the annual comparison in Q3.
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